## Factor Reallocation and Growth in Developing Countries

_IMF Working Papers, June 1, 2000_

## Source details

**Canonical URL:** [Factor Reallocation and Growth in Developing Countries](https://www.imf.org/en/publications/wp/issues/2016/12/30/factor-reallocation-and-growth-in-developing-countries-3583)

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## Bibliographic details
- Authors: Hélène Poirson
- Published: June 1, 2000
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451851717.001

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### Summary and research focus
- Examines the extent to which developing countries benefit from intersectoral factor transfers.
- Specifies the impact and determinants of sectoral changes and of the degree of dualism (or allocation inefficiency) in a dual economy model.
- Derives conditions under which factor reallocation is growth-enhancing.

### Methodology
- Develops a dual economy model capturing sectoral factor transfers and allocation inefficiency (degree of dualism).
- Estimates an empirical error-correction equation for 30 developing countries during 1965-80.

### Key findings and results
- Results suggest that labor reallocation effects are especially important in:
  - countries with high rates of investment (and thus high rates of labor transfer), and/or
  - countries at low levels of development (and thus high degrees of dualism).
- Emphasis on the role of labor reallocation as a channel for growth-enhancing factor transfers in developing-country contexts.

### Subject areas and keywords (as listed)
- Subjects: Capital productivity, Expenditure, Human capital, Labor, Labor productivity, Production, Public expenditure review
- Keywords: Capital productivity, dualism, East Asia, factor productivity, Factor reallocation, GDP growth, growth, Human capital, labor coefficient, labor productivity, Labor productivity, labor reallocation, Public expenditure review, reallocation effect, South Asia, Sub-Saharan Africa, WP

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## Content in this bundle

- **Factor Reallocation and Growth in Developing Countries - WP/00/94**
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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/30/factor-reallocation-and-growth-in-developing-countries-3583_